Gleim 3

Which of the following statements best describes the applicability of a constitutionally valid Internal Revenue Code section on the various courts?

All courts are bound by the Code section.

Susan, a single filer, started a home-based dress business on March 1, 2017. She was an employee and paid income taxes of $6,000 for 2016. Susan's business had net income of $0, $9,000, $11,000, and $15,000 respectively for each of the calendar quarters in 2017. Susan's total tax liability for 2017 was $5,500. Determine the amount of her estimated tax payment due by April 15, 2017.

$0. Susan's tax liability of $5,500 is greater than $1,000, meaning that she must make estimated tax payments For estimated tax purposes, the year is divided into four payment periods, meaning 25% of the annual estimated tax must be paid in each period. However, she is not required to make a payment until the first period in which there is income. Susan, therefore, is not required to make a payment for the first quarter of 2017, as she had no income during that quarter.

Taxpayer D Prior year AGI: $90,000 Total withholding and estimated tax payments: $3,000 Current-year tax liability: $4,500 Prior-year tax liability: $5,000

$1,050. The total installments for estimated payments must be equal to the lesser of 100% (110% for taxpayers whose prior AGI exceeds $150,000) of the prior year's tax 90% of the current year's tax Ninety percent of the current year's tax is $4,050, and 100% of the prior year's tax is $5,000. Thus, Taxpayer D was required to make a minimum payment of $4,050. Since (s)he only made $3,000, $1,050 of this amount will be subject to a penalty. No exceptions apply.

A taxpayer understated the tax liability by $10,000. The total tax liability was $50,000. No disclosure of the return position was made by the taxpayer; however, the basis for the position is reasonable. How much of an accuracy-related penalty will the taxpayer be assessed?

$2,000 A taxpayer's accuracy-related penalty due to disregard of rules and regulations, or substantial understatement of income tax, may be avoided if the return position is adequately disclosed and has a reasonable basis. Generally, the penalty is equal to 20% of the underpayment. Substantial understatement of income tax occurs when the understatement is more than the larger of 10% of the correct tax ($5,000 is 10% of the correct tax) or $5,000. This taxpayer failed to adequately disclose the return position. The penalty is $2,000 ($10,000 understatement × 20%).

Steve and Joyce are married and have estimated taxable income of $168,800. Assume that for 2017, the tax on $168,800 would be $39,980. They have taxes of $35,000 withheld during the year. In 2016, they paid a total of $42,000 in taxes for the year and had adjusted gross income of $185,000. What is their required estimated tax payment for 2017?

$982. The annual estimated tax payment for 2017 that Steve and Joyce must make is equal to the lesser of (a) 90% of the current year's tax or (b) 110% of the tax for the prior year (due to their AGI exceeding $150,000 in 2016). For Steve and Joyce, 90% of the current year's tax equals $35,982 ($39,980 × 90%), and 110% of their prior year's tax equals $46,200 ($42,000 × 110%). Their estimated tax payment for 2017 is $35,982, the lesser of the two amounts. They had taxes of $35,000 withheld during 2017. Therefore, the required, remaining payment is $982 ($35,982 - $35,000). Withholding taxes does not exclude taxpayers from having to make estimated payments.

2. Taxpayer B Prior year AGI: $135,000 Total withholding and estimated tax payments: $1,750 Current-year tax liability: $3,000 Prior-year tax liability: $2,000

250. The total installments for estimated payments must be equal to the lesser of 100% (110% for taxpayers whose prior AGI exceeds $150,000) of the prior year's tax 90% of the current year's tax Ninety percent of the current year's tax is $2,700, and 100% of the prior year's tax is $2,000. Thus, Taxpayer B was required to make a minimum payment of $2,000. Since (s)he only made $1,750, $250 of this amount will be subject to a penalty. No exceptions apply. To test Current year -wthholding To calculate penalties Prior year -withholding

5. Taxpayer E Prior year AGI: $160,000 Total withholding and estimated tax payments: $6,000 Current-year tax liability: $8,500 Prior-year tax liability: $6,000

600. The total installments for estimated payments must be equal to the lesser of 100% (110% for taxpayers whose prior AGI exceeds $150,000) of the prior year's tax 90% of the current year's tax Since the Taxpayer has AGI over $150,000, (s)he must use 110% of the prior year's tax. Ninety percent of the current year's tax is $7,650, and 110% of the prior year's tax is $6,600. Thus, Taxpayer E was required to make a minimum payment of $6,600. Since (s)he only had $6,000 in withholdings and estimated tax payments, $600 of this amount will be subject to a penalty. No exceptions apply, e.g., a $1,000 exception, because $8,500 current-year tax minus no more than $6,000 withholding is $2,500, which is greater than $1,000.

A CPA is researching a tax issue and is attempting to understand the intent of Congress. Which of the following would generally be least useful for that purpose?

A Notice of Proposed Rulemaking. Notices of proposed rulemaking are required for proposed regulations and are published in the Federal Register so that interested parties have an opportunity to participate in the rule-making process. But it does not help a CPA to understand the intent of Congress because it only contains proposed rules and public comments.

All of the following statements are true except

A brother-in-law must live with the taxpayer the entire year to be claimed as a dependent even if the other tests are met.

In 2017, Smith, a divorced person, provided over one-half the support for his widowed mother, Ruth, and his son, Clay, both of whom are U.S. citizens. During 2017, Ruth did not live with Smith. She received $9,600 in Social Security benefits. Clay, a full-time graduate student, and his wife lived with Smith. Clay had no income but filed a joint return for 2017, owing an additional $500 in taxes on his wife's income. How many exemptions was Smith entitled to claim on his 2017 tax return?

A dependency exemption is allowed for the taxpayer and his mother. Smith provided over one-half of her support, and they do not need to live together. The Social Security benefits are not taxable (provisional income not in excess over base amount of $25,000) and therefore not included in gross income. However, a taxpayer loses the dependency exemption for a married dependent filing a joint return, but not if only to claim a refund. Despite providing over one-half of their support, the taxpayer cannot claim his son or his daughter-in-law as dependents.

The date an individual with a calendar tax year who files a Form 4868 must pay income tax due for 2017.

April 15, 2018. Payment of tax is due on the date prescribed for filing the return. The automatic extension to file granted an individual who files Form 4868 on or before the initial due date does not also extend the payment due date. The filing date is October 15

Keen, a calendar-year taxpayer, reported gross income of $100,000 on his 2017 income tax return. Inadvertently omitted from gross income was a $20,000 commission that should have been included in 2017. Keen filed his 2017 return on March 17, 2018. To collect the tax on the $20,000 omission, the Internal Revenue Service must assert a notice of deficiency no later than

April 15, 2021. /The due was on 04/15/18

The table above relates to a 2017 calendar tax year of an individual. Assume each of the following: No waivers or extension agreements are in effect. The IRS has not filed a return on behalf of the taxpayer. The taxpayer has never owned any securities. The taxpayer has never been involved with any tax shelter. No income item is omitted from the return or understated by more than 25%. Only the general statutes of limitations rules apply. Using the information in the table above, select from the option list provided the time after which the individual may no longer claim a refund of overpaid tax. Each choice may be used once, more than once, or not at all.

April 15, 2021. A claim for refund may be made within the time limits specified in the statute of limitations on refunds. A refund may be paid until the later of 3 years from the time the return was filed or 2 years from the time the tax was paid. Therefore, the refund claim must be filed by April 15, 2021. July 15, 2022. April 15, 2021, is 3 years after the return was filed. July 15, 2022, is 2 years after the tax was paid. A refund claim must be filed by the later date, i.e., July 15, 2022. July 15, 2021. July 15, 2021, is 3 years after the return was filed. July 15, 2020, is 2 years after the tax was paid. A refund claim must be filed by the later date, i.e., July 15, 2021. An extension of time to file a return does not extend the payment due date. April 15, 2021. Taxes deducted and withheld at the source during any calendar year are deemed paid by the recipient of the income on the 15th day of the 4th month following the close of his or her tax year. A return filed before the due date is treated as having been filed on the last day prescribed for its filing. The return of an individual taxpayer is due on the 15th day of the 4th month following the close of his or her tax year. Therefore, the return is treated as filed and the tax is treated as paid on April 15, 2018, and a claim for refund must be filed by April 15, 2021. July 15, 2022. A return filed before the due date is treated as having been filed on the due date. The return of an individual taxpayer is due on the 15th day of the 4th month following the close of his or her tax year. April 15, 2021, is 3 years after the return was deemed filed. July 15, 2022, is 2 years after the tax was paid. A refund claim must be filed by the later date, i.e., July 15, 2022. April 15, 2022. In the case of a return filed after its due date, the actual date of filing governs. Three years after filing (April 15, 2022) is later than 2 years after the tax was paid and is the date by which a refund must be claimed. The fourth quarterly installment of estimated tax for an individual's 2017 tax year is due January 15, 2018, and the payment is treated as made on the 15th day of the 4th month following the close of his or her tax year. April 15, 2020. A refund must be claimed by the later of 3 years after the return was filed or 2 years after the tax was paid. If a taxpayer does not file a return, a refund must be claimed within 2 years from the time the tax was paid. Tax deducted and withheld at the source during any calendar year is deemed paid by the recipient of the income on the 15th day of the 4th month following the close of his or her tax year. Therefore, a claim must be filed within 2 years following April 15, 2018. July 15, 2022. A refund must be claimed by the later of 3 years after the return was filed or 2 years after the tax was paid. If a taxpayer does not file a return, a refund must be claimed within 2 years from the time the tax was paid. A refund claim must be filed by July 15, 2022. April 15, 2023. A refund must be claimed by the later of 3 years after the return was filed or 2 years after the tax was paid. If tax was never paid for the tax year, the only basis for a refund claim would be a refundable credit such as the earned income credit. The earned income credit is treated as an overpayment of tax, which would be deemed paid on the 15th day of the 4th month following the close of the tax year. Three years after the date of filing (April 15, 2023) is later than 2 years after the date of the deemed payment (April 15, 2020) and is the last day to claim a refund. April 15, 2020. A refund must be claimed by the later of 3 years after the return was filed or 2 years after the tax was paid. If tax was never paid for the tax year, the only basis for a refund claim would be a refundable credit such as the earned income credit. The earned income credit is treated as an overpayment of tax, which would be deemed paid on the 15th day of the 4th month following the close of the tax year. If a taxpayer does not file a return, a refund must be claimed within 2 years from the time the tax was paid. Thus, a refund claim would have to be filed by April 15, 2020.

The table above relates to a 2017 calendar tax year of an individual. Using the information in the table above and exhibits, select from the option list provided the time after which the IRS may no longer assess additional tax due. Each choice may be used once, more than once, or not at all. Ignore adjustments for weekends and holidays.

April 15, 2021. The statute of limitations for assessment of a deficiency is 3 years from the date the return was filed or due. April 15, 2021. The statute of limitations for assessment of a deficiency is 3 years from the date the return was filed or due. July 15, 2021. A deficiency may be assessed until 3 years after the return is filed, even if it is filed after the due date. April 15, 2021. A deficiency may be assessed until 3 years after a return is filed. A return filed before the last day prescribed for filing is deemed to have been filed on the due date. Thus, the IRS may assess a deficiency on or before April 15, 2021. April 15, 2021. A deficiency may be assessed until 3 years after a return is filed. A return filed before the last day prescribed for filing is deemed to have been filed on the due date. Thus, the IRS may assess a deficiency on or before April 15, 2021. April 15, 2022. A deficiency may be assessed until 3 years after the return is filed, even if it is filed after the due date. April 15, 2022, is 3 years after the return was filed. Never. A deficiency may be assessed until 3 years after a return is filed. If a return is not filed, the statute of limitations period never begins and therefore never ends. Never. When no return has been filed, assessment proceedings may be commenced at any time. April 15, 2023. A deficiency may be assessed until 3 years after the return is filed even if it is filed after the due date. April 15, 2023, is 3 years after the return was filed. Never. When no return has been filed, assessment proceedings may be commenced at any time. Note that the IRS is authorized to complete and file a return on behalf of a taxpayer who fails to file.

Which of the following is an evasion of tax?

Assigning taxable income to a child's tax return.

Before the end of its tax year, EZ Cash Corp. undertakes a legal transaction that it knows will lead to a large capital loss.

Avoidance. Minimization of tax liability through legal arrangements and transactions undertaken before tax liability is incurred constitutes tax avoidance.

A husband and wife can file a joint return even if

The spouses have different accounting methods.

Which of the following is not a requirement that must be met in determining whether a taxpayer is considered unmarried for head-of-household filing status purposes?

For the entire year, an individual's home must be the main home of his or her child, stepchild, or adopted child, whom (s)he or the noncustodial parent can properly claim as a dependent. In determining if a taxpayer qualifies for head-of-household filing status, the taxpayer is considered unmarried if the following requirements are met: The taxpayer filed a separate return. The taxpayer paid more than half the cost of keeping up the home for the tax year. The taxpayer's spouse did not live in the home during the last 6 months of the tax year. The home was, for more than half the year, the main home of the taxpayer's child, stepchild, or adopted child, whom the taxpayer or the noncustodial parent can properly claim as a dependent.

The form used by an individual to claim a quick refund for a net operating loss carryback.

Form 1045

During 2017, Robert Moore, who is 50 years old and unmarried, maintained his home in which he and his widowed father, age 75, resided. His father had $3,100 interest income from a savings account and also received $3,100 from Social Security during 2017. Robert provided 60% of his father's total support for 2017. What is Robert's filing status for 2017, and how many exemptions should he claim on his tax return?

Head of household and two exemptions. Robert may file as a head of household with two exemptions (himself and his father).

Four years ago, when Cox's spouse died, Cox filed a joint tax return for that year. Cox did not remarry, but continued to provide full support for a minor child who has been living with Cox. What is Cox's most advantageous filing status for the current year?

Head of household. Cox qualifies to file as head of household, the most advantageous of all the choices, because Cox provided full support for a qualifying person for more than half of the year.

Ms. W, who is single, determined that her total tax liability for Year 2 would be $10,000. W is required to make estimated tax payments if

Her Year 1 tax liability was $9,000 and her Year 2 income tax withholding will be $8,500.

Ms. N, who is married, wants to file as a single person for the current year. Which of the following will prevent her from filing as a single person?

Her spouse lived in her home for the final 6 months of the current year.

A corporation's tax year can be reopened after all statutes of limitations have expired if The tax return has a 50% nonfraudulent omission from gross income. The corporation prevails in a determination allowing a deduction in an open tax year that was taken erroneously in a closed tax year.

II only. Generally, the statute of limitations bars any attempt to reopen a previously closed year. However, under certain circumstances, the mitigation provisions of the IRC enable either the taxpayer or the IRS to reopen closed years based upon an inconsistent position (taken by the corporation), a circumstance of adjustment (double deduction taken), an "IRS determination," and the correction in the year of error. All of these events are present in situation II; therefore, the mitigation provisions will allow the year to be reopened.

Deb Young has never been married and has no dependents. Her adjusted gross income for 2017 is $263,550. What is her personal exemption deduction for 2017?

If a taxpayer's adjusted gross income exceeded a specific threshold amount (based on filing status), the deduction allowed for personal and dependency exemptions is reduced by 2% for each $2,500, or fraction thereof, by which the adjusted gross income exceeds the threshold amount. Deb's deduction is computed as follows: AGI $263,550 Less: Threshold amount applicable (261,500) Excess amount $ 2,050 Number of $2,500 increments (rounded up) 1 Reduction % (1 increment × 2%) 2% Basic exemption amount $ 4,050 Less: Reduction amount ($4,050 × 2%) (81) 2017 allowable personal exemption $ 3,969

l of the following statements concerning court appeals and court petitions are true except

If a taxpayer's claim for refund is denied by the Internal Revenue Service or if no decision is made in 6 months, the taxpayer may petition either the U.S. Court of Federal Claims or the U.S. Circuit Court of Appeals. Need to send a claim to Court of Federal Claims or District Court

Luis and Rosa, citizens of Costa Rica, moved to the United States in Year 1 where they both lived and worked. In Year 3, they provided the total support for their four young children (all under the age of 10). Two children lived with Luis and Rosa in the U.S., one child lived with his aunt in Mexico, and one child lived with her grandmother in Costa Rica. None of the children earned any income. All of the children were citizens of Costa Rica. The child in Mexico was a resident of Mexico, and the child in Costa Rica was a resident of Costa Rica. How many total exemptions (personal exemptions plus exemptions for dependents) may Luis and Rosa claim on their Year 3 joint income tax return?

In order to qualify as a dependent, an individual must be a citizen, national, or resident of the United States or a resident of Canada or Mexico at some time during the calendar year in which the tax year of the taxpayer begins. Therefore, Luis and Rosa may claim themselves, the two children living in the United States, and the child living in Mexico as dependents for a total of five exemptions. -5

To research whether the Internal Revenue Service has announced an opinion on a Tax Court decision, refer to which of the following references for the original announcement?

Internal Revenue Bulletin.

Which of the following statements is false with respect to the United States Tax Court?

It has jurisdiction over all federal taxes.

The date the second installment of estimated tax is required during 2017 from an individual with a calendar tax year.

June 15, 2017. Individuals who earn income not subject to withholding must pay estimated tax on that income in quarterly installments. For 2017, the installments are due April 15, June 15, September 15, and January 15, 2018. (Dates are adjusted for weekends and holidays.)

Krete, an unmarried taxpayer with income exclusively from wages, filed her initial income tax return for the 2017 calendar year. By December 31, 2017, Krete's employer had withheld $16,000 in federal income taxes, and Krete had made no estimated tax payments. On April 15, 2018, Krete timely filed an extension request to file her individual tax return and paid $300 of additional taxes. Krete's 2017 income tax liability was $16,500 when she timely filed her return on April 30, 2018, and paid the remaining income tax liability balance. What amount is subject to the penalty for the underpayment of estimated taxes?

No amount is subject to the penalty for the underpayment of estimated taxes. The amount withheld from wages by Krete's employer, $16,000, is treated as if an equal part was paid on each due date. Each of these installments meets the 25% of 90% of the current year's tax threshold.

im Planter, who reached age 65 on January 1, 2017, filed a joint return for 2017 with his wife, Rita, who is 50 years old and legally blind. Mary, their 21-year-old daughter, was a full-time student at a college until her graduation on June 2, 2017. The daughter had $6,650 of income and provided 25% of her own support during 2017. In addition, during 2017, the Planters were the sole support for Rita's niece, who had no income. How many exemptions should the Planters claim on their 2017 tax return?

On a joint return, both taxpayers are entitled to claim their personal exemption. The Planters are also able to claim an exemption for both Mary and Rita's niece. Mary meets the qualifying child test, and Rita's niece meets the qualifying relative test. No additional exemptions are allowed for being age 65 or over or for blindness. Thus, the Planters are entitled to four exemptions: one for each spouse, and one for each dependent.

In 2017, Sam Dunn provided more than half the support for his wife, his father's brother, and his cousin. Sam's wife was the only relative who was a member of Sam's household. None of the relatives had any income, nor did any of them file an individual or a joint return. All of these relatives are U.S. citizens. Which of these relatives should be claimed as a dependent or dependents on Sam's 2017 joint return?

Only his father's brother. The IRC lists those relatives who may be claimed as dependents if they receive over half of their support from the taxpayer. The taxpayer's uncle is included in this list, so Sam's father's brother may be claimed by him as a dependent.

A couple filed a joint return in prior tax years. During the current tax year, one spouse died. The couple has no dependent children. What is the filing status available to the surviving spouse for the first subsequent tax year?

Single.

With regard to the statute of limitations, all of the following statements apply to requests to extend the statute. All of the statements are true except

The 10-year collection period may not be extended after it has expired, even if there has been a levy on any part of the taxpayer's property prior to the expiration and the extension is agreed to in writing before the levy is released

In Year 6, an IRS agent completed an examination of a corporation's Year 5 tax return and proposed an adjustment that will result in an increase in taxable income for each of Years 1 through Year 5. All returns were filed on the original due date. The proposed adjustment relates to the disallowance of corporate jet usage for personal reasons. The agent does not find the error to be fraudulent or substantial in nature. Which of the following statements regarding this adjustment is correct?

The adjustment is improper because the statute of limitations has expired for several years of the adjustment. The statute of limitations on a typical adjustment to a return is 3 years following the due date of the return or the date it was filed, whichever is later. Any return filed before the due date is treated as having been filed on the due date. Accordingly, the statute of limitations has expired for several of the years under examination. However, some of the adjustments are permissible (the years where the statute of limitations has not expired).

For head of household filing status, which of the following costs are considered in determining whether the taxpayer has contributed more than one-half the cost of maintaining the household?

The cost of maintaining a household for head of household status includes expenditures for the mutual benefit of the occupants, e.g., food consumed in the home, rent, or real estate taxes. Not included is the value of services rendered in the home by the taxpayer or the rental value of a home owned by the taxpayer.

In which of the following circumstances does the 3-year statute of limitations on additional tax assessments apply?

The general statute of limitations for assessment of a deficiency is 3 years from the later of the date the return was due or the date it was filed.

Harold Thompson, a self-employed individual, had income transactions for Year 1 (duly reported on his return filed in April Year 2) as follows: Gross receipts $400,000 Less cost of goods sold and deductions (320,000) Net business income $ 80,000 Capital gains 36,000 Gross income $116,000 In March Year 5, Thompson discovers that he had inadvertently omitted some income on his Year 1 return. He retains Mann, CPA, to determine his position under the statute of limitations. Mann should advise Thompson that the 6-year statute of limitations would apply to his Year 1 return only if he omitted from gross income an amount in excess of

The normal statute of limitations is 3 years after the later of the due date of the return or when the return was filed. A 6-year statute of limitations applies if gross income omitted from the return exceeds 25% of gross income reported on the return. For a trade or business, gross income means the total of the amounts received from the sale of goods before deductions and cost of goods sold. The 6-year statute of limitations will apply if Thompson omitted from gross income an amount in excess of $109,000 [($400,000 + $36,000) × 25%].

Contributing property to a partnership

Timing of income. When property is contributed to a partnership in exchange for partnership interest, the contributing partner has deferred recognition of gain to a future date when the partnership sells the contributed property.

Leroy owns equipment that has a FMV greater than its adjusted basis to him. Rather than selling the equipment, Leroy contributes it to his partnership, Leroy & Brown, LP in exchange for partnership interest.

Timing. Contributing property to a partnership in exchange for partnership interest causes a deferral of the recognition of gain until the partnership sells the contributed property.

Sam's Year 2 taxable income was $175,000 with a corresponding tax liability of $30,000. For Year 3, Sam expects taxable income of $250,000 and a tax liability of $50,000. In order to avoid a penalty for underpayment of estimated tax, what is the minimum amount of Year 3 estimated tax payments that Sam can make?

To avoid penalties, a taxpayer must pay the lesser of 100% (110% for taxpayers whose prior year's AGI exceeds $150,000) of the prior year's tax or 90% of the current year's tax. Sam's prior year's AGI exceeds $150,000 (because Sam's prior year's taxable income was $175,000). Sam must pay 110% of the prior year's tax, or $33,000.

The authority function

Treasury Regulations. Treasury Regulations interpret specific Code sections and are prefixed by a number that designates the area of taxation referred to by the regulation, e.g., Code Sec. 162, Treasury Reg. 1.162. Internal Revenue Bulletins. Internal Revenue Bulletins (IRBs) are weekly publications that announce official IRS rulings, procedures, and other miscellaneous documents having application to tax law interpretation and administration. IRS Publications. IRS Publications are a useful source of information that often highlight changes in the law and provide examples illustrating IRS positions. Publications should not be cited to sustain a position. Internal Revenue Code. The Internal Revenue Code is the primary source of federal tax law. It imposes the various federal taxes and sets provisions for the administration of the laws. Private Letter Rulings. Private Letter Rulings (PLRs) represent the conclusion of the IRS for an individual taxpayer. Often a taxpayer will request a PLR before filing his or her return to see how the IRS will react. IRS Revenue Rulings. IRS Revenue Rulings are intended to promote uniform application of tax laws by IRS employees and to reduce the number of letter ruling requests. Supreme Court decisions. The Supreme Court is the highest court in the judicial system. Its decisions hold more authority than any other court.

Anderson, a computer engineer, and spouse, who is unemployed, provide more than half of the support for their child, age 23, who is a full-time student and who earns $7,000. They also provide more than half of the support for their older child, age 33, who earns $2,000 during the year. How many exemptions may the Andersons claim on their joint tax return?

Two personal and two dependency. Anderson and spouse may each claim a personal exemption on their joint tax return, so they will have a total of two personal exemptions. The 23-year-old child qualifies as a dependent because all four tests to be a qualifying child are met, including the age requirement of a full-time student. This child's only income requirement is that it not be more than half of the child's support. The 33-year-old child qualifies as a dependent because all four tests to be a qualifying relative are met, including the relationship and gross taxable income requirements. The child's residence is not important because the relationship requirement is met. The gross income is less than the dependency exemption for the current year.